cronos technologies, llc v. expedia, inc., c.a. nos. 13-1538, 13-1541, 13-544-lps (d. del. sept. 8,...
TRANSCRIPT
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8/20/2019 Cronos Technologies, LLC v. Expedia, Inc., C.A. Nos. 13-1538, 13-1541, 13-544-LPS (D. Del. Sept. 8, 2015)
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IN THE
UNITED STATES DISTRICT COURT
FOR
THE DISTRICT OF DELAWARE
CRONOS TECHNOLOGIES, LLC,
Plaintiff,
v.
C.A. No. 13-1538-LPS
EXPEDIA, INC.,
Defendant.
I
CRONOS TECHNOLOGIES, LLC,
Plaintiff,
v.
C.A. No. 13-1541-LPS
PRICELINE.COM, INC.,
Defendant.
CRONOS TECHNOLOGIES, LLC,
Plaintiff,
v
;
C.A. No. 13-1544-LPS
TRAVELOCITY L.P .,
Defendant.
Richard D. Kirk, Stephen
B
Brauerman, Vanessa R. Tiradentes, Sara Bussiere,
B Y
ARD, P.A.,
Wilmington,
DE
Larry C. Russ, Alexander C.D. Giza, Shani M. Tutt, Paul A. Kroeger, Brian D. Ledahl, RUSS,
AUGUST KABAT, Los Angeles,
C
Attorneys for Plainti ff Cronos Technologies, LLC
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8/20/2019 Cronos Technologies, LLC v. Expedia, Inc., C.A. Nos. 13-1538, 13-1541, 13-544-LPS (D. Del. Sept. 8, 2015)
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Jack
B
Blumenfeld, Regina Murphy, MORRIS, NICHOLS, ARSHT TUNNELL LLP,
· Wilmington, DE
John M. Jackson, Nathaniel Nate) St. Clair II, Matthew C. Acosta, JACKSON WALKER
L.L.P , Dallas, X
David Folsom,
~ C K S O N
WALKER L.L.P ., Texarkana, X
Attorneys for Defendants Expedia Inc., priceline.com Inc., and Travelocity.com L.P.
September 8, 2015
Wilmington, Delaware
MEMOR NDUM OPINION
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f ~ ~ ~
·
T ~
U.S. District Judge:
Defendants Expedia, Inc. ( Expedia ), Travelocity.com L.P. ( Travelocity''),
priceline.com Incorporated (n/k/a The Priceline Group Inc.), and priceline.com LLC
( priceline.com ) filed a Motion for Judgment
on
the Pleadings pursuant to Federal Rule
of
Civil
Procedure 12(c) seeking to invalidate certain claims
of
U.S. Patent No. 5,664,110 (the
'110
patent ) for being directed to patent-ineligible subject matter. (C.A. No. 13-1538 D.I. 26; C.A.
No. 13-1541 D.I. 27; C.A. No. 13-1544 D.I. 26)
1
For
the reasons discussed below, the Court w ll
deny Defendants' motion without prejudice to renew at a later point in the case.
B CKGROUND
The
'110
patent, entitled Remote Ordering System, was filed
on
December 8, 1994 and
issued on September 2, 1997. (D.I. 1-1) The patent generally discloses methods and systems for
remote ordering
of
products using:
a central computer (e.g., web server) facilitating remote
communications between a user device and one
of
a plurality
of
merchant databases, unique product codes associated with user-
. interpretable product information (e.g. pricing and availability),
and user and/or merchant identifiers, which allow the user to create
an order list
of
items and interactively update the product
information for the items in said list.
(D.I. 35 at 1-2)
n
September 4, 2013, Cronos .Technologies, LLC ( Plaintif f'
or
Cronos ) filed suit
against Defendants alleging infringement of certain claims of the '110 patent. (D .I. 1) Although
the pending motion was filed prior to claim construction,
the Court has now conducted a claim
1
Unless otherwise specified, all docket citations
in
the remainder
of
this Opinion are to
C.A. No. 13-1538-LPS.
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construction hearing and
haS
issued its
Markman
opinion.
(See
D.I. 86) During the
Markman
hearing the parties also argued their positions
on
patent eligibility.
(See
D.I. 82 ( Tr. ) at 4-23)
LEGAL STANDARDS
Motion for
Judgment
on
the
Pleadings
Pursuant to Federal Rule
of
Civil Procedure 12(c), a party may move for judgment on the
pleadings [a]fter pleadings are
closed but
early enough not
to
delay trial. When evaluating a
motion for judgment on the pleadings, the Court must accept all factual allegations in a
complaint as true and view them in the light most favorable to the non-moving party.
See
Rosenau
v
Unifund Corp.,
539 F.3d 218, 221 (3d Cir. 2008);
see also Maio
v
Aetna, Inc., 221
F.3d 472, 482 (3d Cir. 2000). This is the same standard as applies to a Rule 12(b)(6) motion to
dismiss. See Turbe v Gov't ofVirginlslands,
938 F.2d 427, 428 (3d Cir. 1991).
ARule 12(c) motion will not be granted ''unless the movant clearly establishes that no
material issue
of
fact remains to be resolved and that he is entitled to judgment as a matter
of
law.
Rosenau,
539 F.3d at 221. The purpose
of
udgment
on
the pleadings is to dispose
of
claims where the material facts are undisputed and judgment can be entered on the competing
pleadings and exhibits thereto, and documents incorporated by reference.
Venetec Int' , Inc. ·v
Nexus Med., LLC,
541 F.Supp.2d 612, 617 (D. Del. 2008);
see also In re Burlington Coat
Factory Sec. Litig.,
114 F.3d 1410, 1426 (3d Cir. 1997) (explaining that any documents integral
to pleadings may be considered in connection with Rule 12(c) motion). The issue is not
whether a
plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to
support the claims.
Burlington Coat Factory,
114 F.3d at 1420. Thus, a court
may
grant a
motion for judgment on the pleadings (like a motion to dismiss) only if, after accepting all well-
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pleaded allegations
n
the complaint as true, and viewing them in the light most favorable to
plaintiff, plaintiff is not entitled to relief.
Maio v.Aetna Inc.
221 F.3d 472, 482 (3d Cir. 2000).
The Court may consider matters
of
public record as well as authentic documents upon
which the complaint is based if attached to the complaint or as an exhibit to the motion.
See
Oshiver v Levin Fishbein Sedran Berman
38 F.3d 1380, 1384 n.2 (3d Cir. 1994). The Court
may also take judicial notice
of
the factual record
of
a prior proceeding.
See Oneida Motor
Freight Inc. v ·United Jersey Bank
848 F 2d 414, 416 n.3
3d
Cir. 1988). Ultimately, a motion
for judgment on the pleadings can
be
granted only
if
no relief could be afforded under any set
of
facts that could be proved.
Turbe
938 F.2d at 428.
The ultimate question
of
patent eligibility is an issue
of
law, making i t an appropriate
basis for a Rule 12(c) motion.
See In re Bilski
545 F.3d 943, 951 (Fed. Cir. 2008), aff d 561
U.S. 593 (2010). The Federal Circuit has affirmed District Courts that have granted motions for
judgment on the pleadings based on§ 101 challenges. See e.g. OIP Technologies Inc. v
Amazon.com Inc.
788 F.3d 1359, 1360 (Fed. Cir. 2015);
buySAFE Inc.
v
Google Inc.
765
F.3d 1350, 1355 (Fed. Cir. 2014).
Lack
of
Patentable Subject
Matter
Under 3 5 U.S.
C
§ 101, [w ]hoever invents or discovers any new and useful process,
machine, manufacture, or composition
of
niatter, or any new and useful improvement thereof,
may obtain a patent therefor, subject to the conditions and requirements
of
this title. There are
three exceptions to §
101
's.broad patent-eligibility principles: laws ofnature, physical
phenomena, and abstract ideas. ·
Diamond v Chakrabarty
447 U.S. 303, 309 (1980). Pertinent
here is the third category, abstract ideas, which embodies the longstanding rule that an idea
of
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itself is not patentable. Alice Corp. Pty. Ltd. v CLS ank Int' , 134 S. Ct. 2347, 2355 (2014)
(internal quotation marks omitted). As early as Le Roy
v
Tatham, 55 U.S. 156, 175 (1852), the
Supreme Court explained
h a t [ ~ ]
principle,
in
the abstract, is a fundamental truth; an original
, cause; a motive; these cannot
be
patented, as no one can claim
in
either
of
them an exclusive
right.' Since then, the unpatentable nature
of
abstract ideas has repeatedly been confirmed.
In
re Comiskey, 554 F.3d 967, 977-78 (Fed. Cir. 2009).
nMayo Collaborative Servs.
v
Prometheus Labs., Inc.,
132 S. Ct. 1289 (2012), the
Supreme Court set out a two-step framework for distinguishing patents that claim laws
of
nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications
of
those concepts.
Alice,
134 S. Ct. at 2355. First, courts
must
determine
ifthe
claims at issue
are directed at a patent-ineligible concept.
See id
.
f
so, the next step is to look for an
' inventive concept' -
i.e.,
an element
or
combination
of
elements that is sufficient to ensure that
the patent
in
practice amounts to significantlymore thana patent upon the [ineligible concept]
itself
Id
DIS USSION
Defendants' motion challenges the patent eligibility
of
asserted independent method
claim 22 and its dependent (and also asserted) claims 24, 26-28, 30-32, 34, 41-42, and 44. (D.I.
27 at 2) Yet Defendants' analysis - in briefing as well as during oral argument - is directed
almost exclusively to claim 22, which Defendants contend is representative
of
all the asserted
claims.
There are several considerations relevant to deciding a Rule 12 motion that challenges the
patent eligibility
of
multiple patent claims based
on
analysis of a single representative claim.
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First,. are all non-representative claims adequately represented by
the
representative claim (i.e., do
all
of
the challenged claims relate to the s me abstract idea and do any of the non-representative
claims add one
or
more inventive concepts
thatwould
result in patent eligibility)?
2
Second, are
there issues
of
claim construction that must
be
decided before resolving the motion? Finally, is
there any set of facts that could be proven relating to preemption,3 questions ofpatentability,
4
or
whether the claims solve a technological problem,
5
that would result in determination that
one·or more of the claims are patent-eligible? Answering these inquiries in connection with the
pending motion leads the Court to conclude that the motion should
be
denied without prejudice
to Defendants having the opportunity to raise the § 101 issue at a later stage of the proceedings.
First, Defendants have
not
adequately articulated
why
each of claim 22 s dependent
claims relates to the same abstract idea purportedly embodied by claim 22; nor have they
adequately explained
why
each of the dependent claims fails
to
include an inventive concept.
To
the contrary, Defendants propose at least four different versions
of
the abstract idea to which the
2
See Alice,
134 S Ct. at 2359-60 (2014) (finding 208 claims patent-ineligible based on
analysis of one representative claim).
3
As the Supreme Court articulated
in Alice,
the focus of the second step
of
the
Mayo
test
is whether the claims 'disproportionately t[ie]
up
the use of the underlying' ideas. 134 S.Ct. at
2354 (quoting Mayo, 132 S.Ct. at 1294) (emphasis added). This is the preemption concern that
the Supreme Court .referred to in
Alice.
4
The Federal Circuit has encouraged District Courts to evaluate considerations
analogous to those of [35 U.S.C.] §§ 102 and 103 as part
of
a pragmatic analysis of§ 101 at
the motion to dismiss stage.
See Internet Patents Corp.
v
Active Network, Inc.,
790 F.3d 1343,
1347 (Fed. Cir. 2015). Courts have found guidance in deciding whether the allegedly abstract
idea (or other excluded category) is indeed known, conventional, and routine, or contains an
inventive concept,
by
drawing on the rules of patentability. Id. These same principles would
seem to apply as well to a motion for judgment on the pleadings.
5
See Alice, 134 S Ct. at 2358.
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challenged claims are purportedly directed: (1) creating, modifying, and ordering products from
merchant product catalogues (D.I. 27 at 5); (2) ordering, and receiving a price check on, items
listed in a product catalogue id. at 12); (3) creating, modifying, and ordering lists
o
products
from merchant catalogues (D.I. 41 at 2) (emphasis added); and (4) the full extent
of
the
abstraction is exemplified by the chart on pages 6-8 ofDefendants' opening
brief
[(D.I. 27)]
id.).
Furthermore, Defendants provide no analysis whatsoever for dependent claim 31. In
addition, Defendants' analysis for some of the other dependent claims is conclusory and
unhelpful. ~ e e e.g., D.I. 27 at 13) (concluding, without analysis, that claims 27-28 simply add
more abstract steps to claim 22 ) As there is no indication that the parties have agreed that claim
22 is representative for purposes of the
Court's§
1 1 analysis, Defendants
must
provide at least
some meaningful analysis for each of the challenged claims.
6
Defendants have also failed to address the concepts embodied
in
claim 22 as a whole.
See Alice,
134 S. Ct. at 2361 n.3 ( Because the approach
we
made
explicit
in
Mayo
considers all
claim elements, both individually and in combination,
it
is consistent with the general rule that
patent claims must
be
considered as a whole. ) (internal quotation marks omitted). Instead,
Defendants have engaged in a piecemeal analysis of the individual limitations of claim 22. See,
e.g.,
D.I. 27 at 6-8)
Turning to the consideration of claim construction, here the Court has already construed
the disputed terms. See D.I. 86) Since the Court's claim constructions are now part of the
law
6
Such analysis could address multiple claims at the same time but should.include more
than mere legal conclusions combined with quotations
of
the claim language.
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of
the case, they generally need to e applied at all further stages
of
the
case·,
including with
respect to any analysis
of
patent eligibility.
See generally ArcelorMittal France v K Steel
Corp., 786 F.3d 885,
891
(Fed. Cir. 2015) (holding that District Court's claim construction of
patent before reissue was part
of
law
of
the case and should apply to subsequent proceedings
post-reissue). Yet neither side has briefed
the§ 101
issues here under the Court's actual claim
constructions.
With respect to the third consideration - whether there is
any
set
of
facts that could be
proven that would result in the challenged claims being patent-eligible - the Court cannot say at
· this time that there is no such set
of
facts. See Accenture Global Servs.
v
Guidewire Software,
Inc.,
728 F.3d 1336, 1341 (Fed. Cir. 2013) ( Patent eligibility under §101 presents an issue
of
law that may contain underlying factual issues. ). There may be a set
of
facts related to
preemption, questions
of
patentability, and/or whether claim 22 (and its dependent claims) are
directed to a technological improvement rather than a generic computer implementation
of
an
abstract idea that prevents the Court from determining that the challenged claims are patent-
ineligible. The briefing and evidence now before the Court are not adequate to permit a
definitive answer to these questions at this stage.
8
7
Defendants contend that the claims are ineligible for patentability even applying all
of
Plaintiff's proposed constructions.
See
D.I. 27 at
8
Sometimes undertaking such an analysis
will be a wise approach and may promote efficient resolution
of
the case. Here, however, for
reasons including (but not limited to) the fact that the Court has already construed all
of
the
disputed claim terms and did
not
adopt all ofPlaintiff's proposals, the Court believes the better
use
of
its limited resources will e to assess patentability using the actual constructions that apply
to the case.
8
The parties all take the view that any underlying disputed facts need to be proven y
Defendants
y
clear and convincing evidence.
See
Tr. 4-5, 12-13)
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ON LUSION
Accordingly, the Court will deny Defendants motion for judgment on the pleadings
without prejudice. Defendants may press th ir§ 1 1 challenge to the asserted claims at a later
stage of these proceedings, such as on a motion for summary judgment.
n
appropriate Order
follows.
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
CRONOS TECHNOLOGIES, LLC,
Plaintiff,
v
EXPEDIA, INC.,
.
) .
Defendant. )
CRONOS TECHNOLOGIES, LLC,
Plaintiff,
v.
PRICELINE.COM, INC.,
Defendant.
CRONOS TECHNOLOGIES, LLC,
Plaintiff,
v.
TRA
VELOCITY L.P.,
Defendant.
ORDER
C.A. No. 13-1538-LPS
C.A. No. 13-1541-LPS
C.A. No. 13-1544-LPS
At Wilmington this 8th day of September 2015 consistent with and for the reasons
stated
in
the Memorandum Opinion issued this same date,
IT IS HEREBY ORDERED that Defendants joint Rule 12(c) motion for judgment on the
pleadings (C.A.
No.13 1538
D.I. 26; C.A. No. 13 1541D.I.27; C.A. No. 13-1544 D.I. 26) is
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ENiE
without prejudice.
t ~ r v
HON. L JiONARD P.
ST RK
UNITED STATES DISTRICT JUDGE